Mobile and Sprint merger receives approval recommendation from the FCC

Mobile and Sprint merger receives approval recommendation from the FCC

Mobile and Sprint merger receives approval recommendation from the FCC

According to FOX Business, shares of Sprint, which is being acquired by T-Mobile, rose 20 percent premarket.

The FCC's impending approval is separate from the Department of Justice review of the merger, which senior FCC officials said has no bearing on the commission's decision to move forward. According to terms of the deal, this is meant to "remove any remaining doubts regarding the impact of the merger on prepaid wireless customers and competition", nodding to concerns about the effect on lower-income Americans.

But on Monday, Trump-appointed Federal Communications Commission Chairman Ajit Pai said he would favor approving the proposed T-Mobile-Sprint deal after the carriers agreed to some fairly stringent conditions, including potential fines of up to $2.4 billion.

On T-Mobile's website pushing for the merger they say: "It is absolutely imperative that the US extends the global innovation, technology and economic leadership it seized during the 4G era".

Federal Communications Commission Chairman Ajit Pai said Monday he supported the deal because the two companies promised to expand mobile internet access in rural areas and roll out 5G, the next generation of mobile networks. But the FCC told reporters in a press call today that competition concerns were allayed by the companies' commitments not to raise prices for three years and to divest Boost Mobile, Sprint's prepaid wireless subsidiary that provides service to many low-income customers. The combined company, which will operate under the name New T-Mobile, plans to sell off Boost to "a serious and credible buyer", with plans to submit the name of the buyer to the FCC within 120 days of the merger closing.

The Justice Department in 2011 blocked an attempt by AT&T to acquire T-Mobile, saying the market was already too concentrated to allow it.

The one major new condition imposed by the FCC and agreed upon by the carriers is the sale of Boost Mobile, now a Sprint subsidiary.

The Obama administration rebuffed the companies' earlier effort to merge, as well as an attempted deal between AT&T and T-Mobile, on concerns that such deals would hurt competition in the wireless industry. In its commitments to the FCC, the companies said they will "make available the same or better rate plans as those offered by T-Mobile or Sprint as of February 4, 2019 for three years following the merger".

Metro and Virgin would remain part of the New T-Mobile under this plan.

Pai said Monday that the combination will help bring faster mobile broadband to rural Americans. "By endorsing the T-Mobile deal, and T-Mobile's commitment to rural broadband, you're creating another competitor there where there is none today".

For the past four years, T-Mobile and Sprint have been trying to merge together.

"We've seen this kind of consolidation in airlines and with drug companies", she wrote.

"The construction of this network and the delivery of such high-speed wireless services to the vast majority of Americans would substantially benefit consumers and our country as a whole", Pai said in a statement. "But now the FCC wants to bless the same kind of consolidation for wireless carriers". Pai also noted that they had "guaranteed" that 90 per cent of Americans would get broadband "of at least 100 Mbps" and 99 per cent would have "speeds of at least 50 Mbps" - although that is effectively a restatement of the 5G rollout promise given the additional speeds that come with such technology.

That's enough to satisfy the FCC's Pai. T-Mobile is mostly owned by Deutsche Telekom. The Justice Department is specifically looking at antitrust concerns.

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